Practices:
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Investor Representation
Welcome to Fully Invested, a podcast series from Ropes & Gray’s global asset management practice that provides insight into essential considerations associated with current and emerging asset management topics. Given the still-growing popularity of co-investments—both from the perspective of fund sponsors and fund investors—Isabel Dische, Adam Dobson, Nicole Krea and Jessica Marlin provide an overview in this episode of the basic structures used for co-investment transactions, as well as related issues that commonly arise in these deals. They also briefly touch on how the SEC’s proposed private funds rules from earlier this year may shift the co-invest paradigm.
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Transcript:
Isabel Dische: Hello, and thank you for joining us today on this Ropes & Gray Fully Invested podcast, the latest in our series of podcasts and webinars focused on topics of interest for asset managers and investors. I’m Isabel Dische, a partner in our asset management group based in New York, and co-head of our institutional investor practice. Joining me today are my Boston- and New York-based asset management colleagues Adam Dobson, Jessica Marlin and Nicole Krea. Co-investments have exploded in popularity in recent years, and the four of us have been spending a significant portion of our time advising sponsors and investors on co-investment transactions—both helping paper individual transactions and advising on related regulatory and other issues. Given the continued growth in the popularity of co-invests—both from the perspective of fund sponsors and fund investors—in today’s podcast we wanted to take a step back to introduce our listeners to some of the basic structures, as well as related issues that commonly arise in these deals. We’ll also touch briefly on how the SEC’s proposed private funds rules from earlier this year may shift the co-invest paradigm.
Adam, do you want to kick off our discussion?
Adam Dobson: Gladly. As we suspect most of our audience is aware, sponsors have for years offered co-investment opportunities for favored investors in a fund to co-invest alongside the fund in a deal. Co-investments can be used across asset classes, as well as for both private and public positions. A co-investment can be deal-specific—with the investor deciding to commit co-invest capital to a particular deal, or some sponsors will set up so-called “overage funds” that are designed to invest opportunistically whenever a sponsor’s main fund has achieved its targeted allocation to a particular deal. Some sponsors even will use both …….
Source: https://www.ropesgray.com/en/newsroom/podcasts/2022/June/Podcast-Fully-Invested-Co-Investments